Do you like saving money? Who doesn’t! That is why you bargain for the best deals, don’t you? Would you like to save money on your term insurance plan too?
A term life insurance plan is an essential life insurance plan which provides unmatched financial security. It allows you to take high values of cover without pinching your pockets. In case of an untimely death, this high coverage is paid to your family to take care of their financial needs and obligations. Since it protects the financial freedom of your family, a term plan is a must. Though the premiums of the plan are already on the lower side, what if you can reduce it even further?
Yes, there are ways to save on your term insurance premiums. Let’s find them out –
- Choose a longer tenure
It is always advisable to go for the longest possible coverage tenure. It not only gives you the longest risk cover, the premiums are also low. So, if you go for a longer term of the plan you can enjoy lower premiums.
- Buy young
Did you know that your age affects the premium rate? The older you are, the higher would be your mortality risk which, in turn, causes the premium rates to rise. So, if you want to get the lowest possible premium rate on your term insurance plan, buy a plan when you are young. You can enjoy dual benefits of early cover and lower premium. A win-win situation, don’t you think so?
- Be careful of the coverage amount
Underinsurance is a curse as it doesn’t provide sufficient coverage but so is over-insurance. Both these extremities should be avoided. Just like underinsurance creates a financial gap between needs and benefits, over-insurance results in excess premium payment which is an unnecessary expense. So, when you buy a term plan, choose the optimal coverage amount based on your lifestyle and financial requirements. There are online term plan calculators which help in determining your ideal coverage level. Use these calculators to find out the amount suitable for your needs. Don’t be over-eager about buying a very high coverage. Be careful about the optimal coverage level. Use the calculator, find it out and then choose your Sum Assured.
- Be careful when choosing riders
Riders are additional coverage benefits which enhance the scope of the plan. Though they are important, they increase the premium outgo. Nowadays, many term insurance plans come with various inbuilt rider benefits. You can find accidental death benefit rider, critical illness rider, terminal illness rider, etc. in many health plans. If you want to enhance your cover by adding riders, be careful. Understand the inbuilt benefits first and then choose the ones which you require. Buying a rider which is already inbuilt in the policy would be a waste of money, won’t it?
- Pay premiums in lump sum and regularly
A term insurance plan allows various modes for paying premiums. You can pay them either for the entire tenure or for a limited duration. Moreover, the annual premium can be paid in half-yearly, quarterly or monthly instalments too. Limited premiums are higher than regular premiums as they recover the cost within a limited duration. Similarly, monthly or quarterly premiums are higher than annual premiums as the administrative costs of the company increase. So, you should, ideally, choose to pay premiums for the entire plan duration and that too in annual or half-yearly instalments.
- Look for rebates and discounts
Term insurance plans offer various types of rebates and discounts in their premium rate. There is a discount for paying annual or half-yearly premium and for buying the policy online. Moreover, if you are a female or a non-smoker, your premiums rates would be low. So, buy the policy online and try giving up your smoking habit to save money.
- Be healthy
Your health and lifestyle habits also influence your premium. If you smoke or drink alcohol, have a bad medical history, are overweight, engage in hazardous activities or are employed in a dangerous occupation, your premiums would be higher. So, try and maintain a healthy lifestyle, avoid dangerous activities and enjoy lower premiums.
Did you know of these ways of reducing premiums?
Now you do! So, the next time you buy a term plan look for these ways and lower your premium outgo.